How Car Insurance Works in India: A Comprehensive Guide

Each year, a greater number of cars get added to Indian roads, especially in the urban areas. Such an increase causes a burden on the existing infrastructure, and can often lead to more congested roads.  Accidents can often take place on congested roads, and if your car gets damaged or damages another car, the cost of repair and compensation can be a lot to pay out of pocket. Instead, having comprehensive motor insurance for your car helps in providing you with financial assistance from such financial and legal abilities.

How does car insurance work?

If your car gets damaged in an accident, you will have to get the damages repaired. If you do not own car insurance, you will have to pay out of pocket for the repairs. If you own comprehensive motor insurance, the policy will cover the cost of repair. If your car causes damage to a third-party vehicle, you would be required to compensate them for the damages caused. If there are any injuries caused or a death takes place, the cost of legal liabilities would also have to be covered by you. However, if you have third-party car insurance, the policy will cover the cost of third-party damages and other liabilities that may arise from the accident.

How to file a car insurance claim?

In the event your car gets damaged or causes damage in an accident, you can file a claim for compensation. If you have online car insurance, these are the steps to file the claim:

Inform the insurer

The first step is to initiate the claim process. After the accident has taken place, you are responsible for informing your insurer about it. You can approach your insurer through two mediums:

• Through their claims helpline number
• Through the claims section on their website

Notify the police

After the accident has taken place, you are required to inform the police about the accident. If the damages caused are minor, an FIR may not be needed. However, if major damage has been caused either to your or to the third-party vehicle, you are required to file one. Most insurance companies require a copy of the FIR, so make sure to clear this with your insurer. 

Capture evidence

Take photos and videos of the damage caused to your vehicle. Do the same with a third-party vehicle. This is required by the insurer to verify the damages mentioned by you.

Submit documents

Once you have gathered all the information, submit the documents to your insurer, such as a copy of your policy document, the FIR, and photos and videos which you took. It is on the basis of these documents that your insurer will verify your claim.

Get the vehicles inspected

Your insurer will send a surveyor to inspect the damages caused to your car. The same will be done for the third-party vehicle. They will check if the damages match those mentioned in your claim. They might collect additional information which will then be provided to your insurer.

Get the vehicle repaired

If the insurer is satisfied with all the details provided by the surveyor and finds your claim to be genuine, they will compensate you*. You have two options to claim this compensation:

1. Get either vehicle repaired at a garage and pay for repair work. Submit the bill to your insurer and you will be reimbursed*.
2. Get either vehicle repaired at a network garage. The garage owner will bill the insurer, who will initiate a cashless settlement with the owner*.

Also Read: Important Factors of Car Insurance Claim Settlement Ratio

Types of claim settlement

Depending on the type of insurance you have, the claims could be categorised into:

1. Third-party claim - The third-party would be compensated for the damages caused to your car. You do not get compensated for own damages*.
2. Own damage claim- You get compensated for the damages caused to your vehicle. However, you have to compensate the third-party out of your pocket*.
3. Comprehensive settlement - Own damages and third-party damages are both compensated for*.

If you wish to purchase car insurance, you can do so by following these steps:

1. Visit the insurer’s website
2. Provide contact details and details of your car
3. Select the type of insurance you wish to purchase- third-party or comprehensive
4. If you opt for comprehensive insurance, customise the policy by adding riders to it
5. Make the payment online

With these few simple steps, you can now easily buy and own car insurance online. Also Read: Bike and Car Insurance Claim Process

Conclusion

These steps show how car insurance works and how compensation can be claimed after an accident has taken place. If you wish to purchase car insurance to enjoy its financial protection, do not forget to use the online car insurance calculator to get a quote for the policy you are looking for. Also Read: Car Accident Insurance Claim Process *Standard T&C apply Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms, and conditions, please read the sales brochure/policy wording carefully before concluding a sale.